Is the Dallas/Fort Worth Apartment Building Investment Cycle Peaking or just taking a breather?

In their RECON report The  Real Estate Center @ Texas A&M quotes The Dallas Morning News on apartment building investment in the DFW market:

“Apartment leasing in Dallas-Fort Worth dipped for the first time in over two years.

Net leases fell by 270 during first quarter 2012, with most of the declines occurring in the northern suburbs.

Apartment Building Invesment Cycle peaking in Dallas?

Greg Willett of apartment analyst MPF Research believes the slight dip is nothing to worry about.

“I don’t think one quarter of slight resident loss should be viewed as a big deal, especially when demand in first quarter usually is pretty mild anyway,” he said. “The job numbers still look good, and a comeback for the for-sale housing sector actually could drive them higher.”

The North Texas area has added about 40,000 apartment units since the beginning of 2010. An additional 12,000 units are either planned or under construction — more than twice the units a year ago.

Despite the decline, rents and occupancy are both up. North Texas apartments rent for an average $806 a month, the highest ever for the area. Occupancy is at about 93.1 percent, up 1.5 percent from first quarter 2011.”

OK so 12k more units to come on line and while rents and occupancy are still growing up net leases (new apartment units – new leases) dip for the first time in two years. I wonder where sales prices are in comparison to replacement cost- anyone?

See the DMN article here (subscription required): Dallas-Fort Worth apartment demand falls for first time since 2009

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